Cryptocurrency investing can be a great way to diversify investments but figuring out which cryptocurrency is suitable and which isn't can be challenging. In order to make an informed investment decision, it is important to know how to analyze cryptocurrencies.
1. Review the White Paper
Most crypto projects provide a white paper, which helps define the objectives and technical details of the cryptocurrency. While some white papers may contain technical jargon not understood by casual investors, it is important to read through the paper to learn about the vision of a project.
The white paper should clearly define the goals of the project, how their technology will achieve those goals, as well as how the cryptocurrency will function. Most white papers define a problem that is being solved with the advent of the currency itself, and this problem and solution should be crystal clear to investors.1
A red flag on any crypto project would be a white paper full of generic promises with no details.
2. Research the Team
Cryptocurrencies are typically created by a team of founders and software developers that help create the solution to a problem. To better understand how a project could perform, you should research the professional experience of the team running the project.
This may include reviewing the LinkedIn profile to learn about the professional background of any of the technical or leadership staff, as well as learning about the previous projects that the team members have launched. Also, the “About” page on any cryptocurrency’s website should clearly articulate who is helping build the project, and what their expertise entails.
Continue reading: https://www.investopedia.com/analyze-crypto-6456223
1. Review the White Paper
Most crypto projects provide a white paper, which helps define the objectives and technical details of the cryptocurrency. While some white papers may contain technical jargon not understood by casual investors, it is important to read through the paper to learn about the vision of a project.
The white paper should clearly define the goals of the project, how their technology will achieve those goals, as well as how the cryptocurrency will function. Most white papers define a problem that is being solved with the advent of the currency itself, and this problem and solution should be crystal clear to investors.1
A red flag on any crypto project would be a white paper full of generic promises with no details.
2. Research the Team
Cryptocurrencies are typically created by a team of founders and software developers that help create the solution to a problem. To better understand how a project could perform, you should research the professional experience of the team running the project.
This may include reviewing the LinkedIn profile to learn about the professional background of any of the technical or leadership staff, as well as learning about the previous projects that the team members have launched. Also, the “About” page on any cryptocurrency’s website should clearly articulate who is helping build the project, and what their expertise entails.
Continue reading: https://www.investopedia.com/analyze-crypto-6456223
